GDP: Slow but not stagnant

For once, the first estimate for growth in the first quarter is in line with expectations - but it would be hard to argue that it's good news.

Not so long ago, many were hoping for a strong bounceback from the slowdown at the end of 2010. Instead, the figures suggest that the UK economy has barely grown at all since the summer. However, even more than usual, it's important to look behind the headline.

If you look at the performance of individual sectors you come away feeling more upbeat: important parts of the economy are doing quite well, even as others are struggling to move ahead. As I said on the Ten O'Clock news last night, the economy's not doing nearly as well as we would hope, this far into a 'normal' recovery. But very little about the last few years has been normal. When you look at the sectoral breakdown of today's figures the picture is one of modest growth, but not (yet) stagnation.

The first, and most obvious, point to note is that the construction sector has - once again - made an out-sized contribution. I have discussed the role of construction in the output numbers before. The new GDP figures show a 4.7% drop in output in this sector in the first quarter - the largest quarterly fall since the first quarter of 2009, in the middle of the recession. Were it not for this sharp decline in a sector accounting for just 6% of national output, today's GDP figure would not be 0.5%, it would be 0.8%.

Is there anything fishy about these numbers? My conversations with construction companies and people involved in the construction products industry suggest there might be. It's not so much that the figures are wrong - but that they might be running 4-6 weeks out of date.

As I've noted, for just over a year the ONS has been using monthly figures for construction output, rather than quarterly ones. The statisticians believe that these are not just more timely but also, possibly more accurate, but the series didn't exist until January 2010, so no-one can say for sure what impact the change might have had.

The answer might be that it doesn't make any difference at all - in the long run. But as Dr Noble Francis, economics director at the Construction Products Association, points out, it's easy for contractors to know the value of new orders received in a given month - they just add up the value of the contracts. Estimating the value of their output in that same month is trickier; all they really know is what they've been paid for, which would usually be work done 4-6 weeks before. When the figures were quarterly, it's plausible that more of the difference between the two figures used to get ironed out in the figures presented to the ONS.

This tallies with the numbers we've seen in the past few months, which showed extremely sharp declines in construction output in January and February, even when the weather was fine and the PMI and other surveys suggested that business was fairly brisk. But the official numbers did then show a sharp bounce back in construction in March.

If Dr Francis is right - that strong March figure contains a lot of business carried out in January and February, and the pace of activity on the ground was stronger in the first quarter than the ONS suggests. But I should add that no-one in the construction business is expecting 2011 to be a banner year, with public investment falling off a cliff and private construction still looking subdued.

Second, the productive side of the economy is still doing well, with output now 2.6% higher than in the first quarter of 2011. That's the fastest growth in that part of the economy for quite a long time, though there are signs that the pace of the recovery is starting to slow.

Simon Ward, of Henderson Global Investors, has the most upbeat take on the figures.

"Combined services and industrial output, accounting for 93% of GDP, rose by 0.8% in the first quarter, more than recouping a 0.4% fourth-quarter loss. Monthly estimates, moreover, imply that March output was 0.3% above the first-quarter average, so the second quarter may record a 0.3% gain even if activity is static between March and June.

The notion that the economy has been growing at or slightly above trend is consistent with a steady rise in aggregate hours worked and an erosion of spare capacity reported in business surveys, including the Bank of England's agents' survey."

But, for all the silver linings, there's a still a sizeable cloud hanging over these figures, and it's called the UK consumer. We won't have a direct measure of household consumption in the first quarter for a while, but even before these figures came out, you could say the household sector was technically back in recession, with household consumption falling in both the third and fourth quarter of 2010. Indeed, some would say there had been no recovery for households in the first place: this measure of consumption barely grew at all in 2010.

Today's figures show services up 0.9% on the quarter, but only slightly up on the third quarter of 2010, and only 1.1% higher than a year ago compared with 1.8% growth for the economy as a whole.

Looking at the consumer confidence figures and the noises coming from the High Street it's difficult to see this part of the economy gaining a lot of momentum in the next few months, while most industrial surveys suggest that part of the economy might be starting to slow.

To repeat, the figures show a relatively slow moving economy, not a stagnant one. But they are a disappointment to anyone - like the Treasury and the Bank - who had hoped this second year of recovery would be stronger than the first. Interest rates are now much less likely to go up - and, rightly or wrongly, the sound you hear in the City these days is that of 2011 growth forecasts being revised down.

Comment number 4.

Is there anything in the last 2 1/2 years in the liquidity trap countires, UK included, to contradict this from Paul Krugman blog, April 25, 2011, 'Thinking About Macroeconomics'?:

"Not all readers of this blog have been reading it consistently for the past few years, and as I read some of the comments it’s clear that many people don’t know where I’m coming from on macro issues. So it may be worth reiterating a point I’ve made before — that I’ve actually been very consistent on this stuff, and that there’s a simple model underlying almost everything I write about macro.

My view is that we had a deleveraging shock that landed us in a liquidity trap — a situation in which short-term nominal interest rates are close to zero, so that conventional monetary policy has no traction. And I had worked out the implications of a liquidity trap long ago. In a liquidity trap even large increases in the monetary base aren’t inflationary; even large government deficits don’t drive up interest rates.

What’s striking to me is the way people who reject this framework keep inventing special reasons to explain why things aren’t going the way they “should” — e.g., it’s QE2 that’s holding down those interest rates, so just you wait, or the surge in commodity prices (driven by growth in emerging markets) is a harbinger of huge inflation here, never mind the flatness of wages. But as I see it, things have gone pretty much the way a model that we had before the crisis said they would."

Comment number 5.

There is no alternative to the current long, hard grind into recovery. The US is the only economy trying the Ed Balls school of debt denial and even with their unique status as the world's reserve currency we are hearing grumblings from the IMF, the BRIC economies and the credit agencies about their inaction over their debt position and continual QE. If we tried to delay tackling the defecit then the costs of our borrowing would escalate further compounding the problem.

The consumer is not in a position to boost the recovery as they are still paying for the debt boom of the last Government. At the same time we lack a strong manufacturing base to lead a corporate recovery - something I blame the last Tory government for along with Labour. Whilst holding back the cuts might make the country feel better in the short term it would only make the eventual pain that much worse.

During the dip, service exports fell by 3%, while manufactured imports fell by 10%.In some ways, that would be seen as a good thing...no? Net exports of GBP (new debt) to pay for foreign-manufactured goods went down.

In the light of these Mushroom is puzzled about how claiming "economic recovery" by comparing GDP last year with the GDP this year makes any sense at all?

Mushroom suspects that the mantra of "its ok to run a deficit, because a deficit fuels growth" still hasn't been properly challenged. (It might, or it might not...it depends what it gets spent on.)

Running an ever-increasing deficit to pay for imported goods just so you can show an increase in GDP and call it "growth" doesn't look real smart to this mushroom.

Comment number 7.

I agree with you Stephanie that the Bank Of England must be very disappointed. It has cut interest-rates to 0.5% and spent some £200 billion on asset purchases only to find that over the last six months we have had no economic growth.Money well spent? It was put well here.

"This brings me back to a theme of mine for the UK which is stagflation. How do we define it? No growth since the third quarter of 2010 and an official inflation rate which at 4% is twice its target seems to do the job. The first part of the sentence gives us the stag and the second the flation.

If we put to one side my view that the UK needs a change of economic policy and look at the consensus view of our Monetary Policy Committee it is apparent that they are in danger of not only failing on my terms but also failing on their own. In truth we can see that they have really targeted economic growth in the UK and the result of this has been no growth at all over the past six month."https://t.co/N7lgcyW

Comment number 8.

1. the construction industry situation is critical - the big spending on the Olympics build and the Darling stimulus package are both coming to an end and the real impact of slamming the brakes on for public spending translates into a massive contraction in new construction starts from April, plus the housing market is at best flat - the building industry told Darling that 330,000 jobs would be retained from the stimulus package - I'd say we are now looking at 500,000+ job loses in this sector over the next 6-9 months.

2. With a chain of profits warnings and the fall in demand in retailing, this sector as you rightly point out is already in recession - and headed much deeper - again a lot of job loses looks highly likely.

3. Defence manufacturers are already shedding jobs rapidly and the MoD is going to have to freeze equipment purchases to fund operations in the middle east, which could see new theatres opening up shortly - Syria being but one.

4. The large cull of public sector workers is only just about to begin to bite - this will depress demand even further and consumer confidence.

5. Taking £110 Bn out of the economy will dramatically cut aggregate demand - just how much this will be is a moot point and depends on whose multiplier you believe, but anywhere from £250 Bn to £1Tn is the sort of ranges being discussed.

6. The full impact of the oil price rise is not reflected in these figures yet - IMHO this will have significantly reduced demand, slashed margins and driven up costs, as well as impacting the balance of payments, so if the economy is flat, then this alone would be enough to tip GDP negative in the next quarter.

7. Manufacturing has risen but almost entirely as a consequence of the devaluation of Sterling by a third since the election, so making our exports more competitive - fine if you're an exporter, but it has also driven up the cost of imports such as food, clothing and energy quite dramatically, so the rest of us are paying for this and unless manufacturers take on more staff and pay better wages and so stimulate demand in the economy, we're only robbing Peter to pay Paul - and in this case, taking far more off Paul than Peter is getting.

As the OBR has now got its forecasts wrong at virtually every level, at what point will Mr Chote fundamentally revise his assessment of government economic policy downwards to meet the reality of the Briti

Comment number 9.

Good article SF and consistent with what you were saying last year when the GDP figures were slightly boosted by construction.

For me the figures were broadly as good as we could expect - with decent (not booming) manufacturing/service growth figures.

The problem for the economy is everyone keeps looking to get a boost from the old sources of growth - debt led consumer spending/ government spending/ construction. These are going to be drags on growth for a considerable time and there is not a lot we can/should do about it. A national period of saving (debt paydown/ austerity or whatever you want to call it) is inevitable.

The only issue is the length of time this takes to unwind and rebalance the economy.

Comment number 10.

I read here and many other places that the economy has 'barely grown' in the last two quaters. By my calculations, if the base level was 100 at the end of Q3 2010, Q4 2010 saw a 0.5% contraction taking us to 99.5. Q1 2011 saw a 0.5% expansion leaving us at 99.9975. So the economy has not 'barely' grown, but contracted, over the previous two quarters.

Comment number 12.

Not to worry: the markets have been so manipulated that GDP, supply and demand, etc. hardly mean a thing.The only "sector" I'd worry about is the collapse of the American dollar and a change in world currency. Have you thought about the impact of that on your GDP?You are absolutely right: "...very little about the last few years has been normal. When you look at the sectoral breakdown of today's figures the picture is one of modest growth, but not (yet) stagnation.". Maybe. To get an accurate picture you need a table of subsidization, and other forms of market manipulation. Construction sector has only begun to fall because when QE3 hits the world, commodity prices are going to go through the roof. Have you thought about this impact on your GDP? Is there anything fishy about these numbers? Yep, subsidization, manipulation of supply and demand, pending QE3 and its impact on commodity pricing. Construct all you want, but there will soon come a point where prices and buyers will be out of site. Right on again: Do not expect a constructive banner year. The pace will slow, and the UK does not hold the control. The Americans do under QE3 and its potentially damaging affect on commodity pricing. Depending when the US releases QE3, construction activity will almost simultaneously go static, as in full stop. I don't think it's the consumer-reluctance that's hanging over any one's head. It's the economic manipulation, the strangling of honest supply and demand, the inability to trust projections. Of course, the household sector is back in recession, with household consumption falling in both the third and fourth quarter of 2010.If you think household consumption might be starting to slow, just wait for QE3. The Treasury and the Bank had hoped this second year of recovery would be stronger than the first.How? Wishful thinking?You cannot stimulate your way out of recession. Show me one country that stimulated its way out of recession - just one. Stimulation was stupid, artificial and manipulated by the bankters.

Comment number 13.

Where did previous recoveries come from ? Consumer led on both sides of the Pond.

Has anyone done an analysis (Stefanie, your next project methinks) of how the UK economy would have looked, say, from 1988 to 2008, without consumer booms (bubbles) fueled by property bubbles and equity withdrawal.

Much is made of German reliance on exports and their rather tame growth in domestic consumption. The tendency being to earn and save rather than buy on credit or use equity withdrawal. Sounds like a plan, coupled with the ability to makes artefacts the world wants.

My guess the only recovery will be a faux recovery based on another engineered property boom or no recovery at all - but we will have high inflation and higher interest rates.

Comment number 14.

This is not a real recovery since the numbers will need to be restated and are not from a reliable source. Who trusts any government data these days?

It is a known fact that unemployment is actually at a much higher level than numbers show. Household debt continues to drag on growth. This will further decline when mortgage rates actually rise again.

However, this proposed growth when inflation is taken into account is actually a fall. Statistics - wonderful.

Comment number 16.

12. At 13:53pm 27th Apr 2011, BluesBerry wrote:You cannot stimulate your way out of recession. Show me one country that stimulated its way out of recession - just one. Stimulation was stupid, artificial and manipulated by the bankters.

You can mitigate the effects of a severe recession - as Gordon Brown did in 2008 - but at the end of the day you are just 'kicking the can down the road'.

Comment number 17.

The figure is pretty bad and just shows we are wallowing along with a large anchor of imminents cuts to drag us down next. When you consider that Osborne was happy to use the accuse that the snow subtracted 0.5% from growth in Q4, we should expect this to ‘bounce back’ in Q1.

GDP is actually about 1.1% lower today than the OBR thought it would be 10 months ago, 0.8% lower than was assumed back in November and about 0.2% lower than the forecast from last month. How many more revisions will there be?

Comment number 18.

This country lacks imagination and increasingly the young have no chance to gain a work ethic. Greed at the top has mired this country moving production steadily abroad, selling our primes businesses and thwarting long term investment by valueing everything short term. Its no wonder that were so reliant on Banks & the service sector manufacturing never had a chance and now virually lives abroad just look in any hardware, electronics, car show room etc. The governments of this country openned the door to sell anything & everything now we are reaping what we sow and still the official line is the same. Without a long term meaningful manufacturing plan were remain a seconf tier country that were becoming.

Comment number 20.

Many people expecting a faster recovery? Who are these unrealistic optimists? They haven't read The Economist's assessment of slumps/recessions of the last 100 years, wherein it was shown that 'ordinary' recessions took two or three years to recover from but financial busts were much worse, they took between 5 and 7 years to get over. No wonder the Coalition want a statuary 5 year term.

Comment number 21.

The one thing this country does not lack is imagination, what it seriously lacks is the capital or availability of capital to be able to take innovation to market and exploit it. ARM may have just made £50m but they should be making ten fold that by actually making the things. Until we have government and a system which will invest heavily in education, R & D and seed capital we are at the whim of the technological gods waiting for the next big thing that drive new growth and services. In the 90's we had the Internet and young people could have an idea and only need the fruits of their own labour to bring it to market, but that kind of economic driving force is historically very rare.

Comment number 22.

The fact that GDP also includes public sector work is hardly mentioned. After spending cuts in that area, only sustainable via large amounts of borrowed and printed money, and the reliance on people getting into debt to pay for cheap goods and services, current REAL growth is more than respectable. It also makes the predictions of left wingers hoping for, and trying to talk us into, a double dip recession now look rather silly and squalid - especially as most other major economies are now following Osborne's responsible lead.

Comment number 25.

"The fact that GDP also includes public sector work is hardly mentioned. After spending cuts in that area, only sustainable via large amounts of borrowed and printed money, and the reliance on people getting into debt to pay for cheap goods and services, current REAL growth is more than respectable. It also makes the predictions of left wingers hoping for, and trying to talk us into, a double dip recession now look rather silly and squalid - especially as most other major economies are now following Osborne's responsible lead."

Public sector funding wasn't subject to wholesale cuts until 1 April 2011 so it isn't material to this GDP calculation. When it does "Kick in" believe me the effect on GDP will be more than significant.

Comment number 27.

Steph - no mention of the snow in this article? You were very quick to assess the impact of the snow when the Q4 2010 figures were published, so how much of this 0.5% "bounce" is actually just delayed activity from the last quarter?

Also, I fail to see how the economy shrinking over a 6 month period tallies with your assessment of "slow, but not stagnant". Indeed, if not for the snow, wouldn't you now be declaring a technical recession?!

Comment number 28.

10/11. Before relying too much on statistical pedanticism, do bear in mind that GDP growth figures are rounded off to the nearest 0.1%. So the 0.5% contraction and growth could easily be anywhere between 0.45% and 0.55%, which in turn roughly means economic growth could be anywhere from +0.1% to -0.1%. And that's before taking into account that this quarter's figures could easily be revised either way in the next few months.

Anyway, what does it matter if it's a growth or a shinkage if it's 0.1% either way? For all intents and purposes, it's as good as zero. (Unless, of course, you really want to interpret the figures as economic shrinkage so that you can make yourself feel better by proclaiming doom and gloom.) Yes, there's a long way to go, but there's no point in trying to make things sound as bad as possible for the sake of it.

Comment number 29.

The problem for the economy is everyone keeps looking to get a boost from the old sources of growth - debt led consumer spending/ government spending/ construction. These are going to be drags on growth for a considerable time and there is not a lot we can/should do about it. A national period of saving (debt paydown/ austerity or whatever you want to call it) is inevitable. "

Where do you think money for all this is going to come from? As Richard Koo has said, in a national economy if everyone tries to save at the same time we run into a massive fallacy of composition problems. Money saved or debt repaid get stuck in a banking system and money supply diminished rapidly.

Comment number 30.

When he knows he is on dodgy ground Cameron usually says something untrue.As well as his patronising arrogance towards women today he said that EdMilliband had predicted a double dip w hen in reality Milliband has only said there was a risk of one and most economists have said something similar and the economy is in fact flatlined for 9 months. Cameron simply cannot be trusted when defending the indefensible.

Comment number 31.

It tickles me that if you question the incumbents in Westminster village that you must be a left winger. Strange were not the conservatives in when the early nineties recession occurred. So riding the dipper is not limited to just one party then. Amazing.

Comment number 32.

Post @24 regarding @ post 5. Well said Sigmar! Humour on these financial blogs, most welcome.

My own view is, that the sooner we accept that we have NO control over what our incompetent politicians do with our own economy, and the civil service at Whitehall too, the better. The banks still have the rope round all our necks - and in charge of the trapdoor too?

As for only two BBC paid financial journalists' blogs. Oh dear - surely the BBC can do better than that? Personally, I don't care what the BBC pays Robert and Stephanie. However, it would be more .... democratic if the BBC employed more financial, and for that matter, more political blogers. Just a few thoughts to recommend a less .... incestuous form of journalism on these serious subjects? Hope this gets past the Mods.

Comment number 33.

In my second job, many moons ago, my manager told me to be always very aware of economists because they tended to be terrible mathematicians. After a life time, being now retired, I still think he was spot on, and yes I am a mathematian.One of the results is that economists tend to be more optimistic and the likes of me a lot more pessimistic and by the way normally more to the point.

Comment number 34.

How we characterize the latest GDP trend is certainly not the main point, agreed. What we do about the figures is more important - in particular given the looming public sector cuts and the dominant reality that much previous UK GDP growth was debt-fuelled.

Nonetheless, I laboured the point (at 19) simply because accuracy matters. The FT says 'at best stagnant' (perhaps worse) while the BBC headlines this piece 'slow but not stagnant'. There is a right and a wrong on the figures as we have them and the FT, not the BBC, has it right.

Comment number 36.

How sure are you of the Britain's debt figures?Yesterday, the EU added some four billion euros to Britain's reported deficits over the past four years because of reservations over unaccounted-for 1. military spending and 2. domestic bank bailouts.In other words there appears to be some doubt on the quality of the data reported by the United Kingdom.More specifically, this was due to questions relating to 1. when military expenditure is reported as well as 2. funds pumped into failed lenders Bradford and Bingley and Northern Rock by the previous Labour Administration.Britain, already committed to the War in Afghanistan, is a major contributor to military action against Gaddafi Loyalists.Apparently, Britain does not record military expenditure on a delivery basis, as accounting requires. The military impact on the government deficits between 2007 and 2010 amounted to more than two billion euros. The bank bailouts account for a sum almost as large.Britain's deficit for the 2010-2011 financial year fell from almost 162 billion euros the previous year to just below 147 billion, after cuts ordered by David Cameron.The cumulative national debt, however, rose by almost 20% to more than 1.2 trillion and now accounts for 82.5% of GDP.While its ratio remains slightly better than euro-zone giants Germany, France or Italy, in the space of the last four years, it has risen rather alarmingly from 43%.In a new category, the EU now also logs inter-governmental lending = bailout funding. Britain has committed to loaning money to Ireland, as well as underwriting some EU bailout funding for Greece and Portugal, but SOMEHOW THIS COLUMN SHOWED EMPTY for the government in London as of April 2011.

Comment number 37.

Stephanie, maybe I have got my facts wrong as I do not have access to all of the data, but there appears to be an anomaly with the growth data that politicians and political commentators have not seemed to notice. The statement that 0.5% growth this quarter has made up for the -0.5% in the previous quarter is mathematically incorrect; it would in fact mean the economy is still in a worse position than it was 6 months ago.

For example, if you have £100 and reduce it by 20%, the new amount would be £80 which is a £20 reduction. If you then increase that £80 by 20%, there is an increase of £16, meaning the new total is £96. The percentage decrease and increase are exactly the same, but this new total is £4 of the original £100 you started with.

Therefore, the reduction in GDP has not been fully reversed, don’t be fooled by the figures!

Comment number 38.

Interesting that Mr Osborne avoided the cliche that the private sector is going to provide the growth. Had he missed the fact that Nokia, a high tech employer and possibly the largest employer in Farnborough is shedding 4,000 jobs worldwide, most of them in the UK. I suppose he was so relieved that there was any growth at all if you consider 0.5% as growth that he didn't notice it. The increase in VAT and the rise in unempolyment in the public sector will appear in the next quarters figures, if the growth is still abysmal, what is his fall back position? assuming that he's managed to think a little further ahead than the local elections. This government is all it promised to be a disaster for the country and the country's employers and employees. He can no longer blame the previous government, a bad winter, the price of oil or the EEC. He really needs to get a grip with flushing what finances we have left down the toilet such as spending in Afghanistan, Libya and supporting the USA in its semi imperialist intereference in the Middle East. I notice that HM Revenue & Customs are now targetting self employed plumbers, I suppose they are easier to target than idle rich tax avoiders, sorry I mean their friends. Despite all this we're all in it together according to Dave, so perhaps Dave could ask his wealthy friends to pay for the policing at the Royal wedding, not a hope of course.

Comment number 39.

As a professional working in the construction industry I know that many contractors and other professionals are surviving from contracts that commenced during the previous governments investment programs, particularly in social housing, and many of these will soon be coming to an end. With the private sector only just "ticking over" I would expect that by the autumn, if there is no financial commitment from this government then a large proportion of the construction industry will just disappear, jobs included and a serious knock on effect to the industry's suppliers & manufacturers. We "ain't seen nothin' yet" to coin a phrase.

Comment number 40.

I know that this is an economic rather than a political blog, but I do believe that part of the low numbers is down to politics. For Labour to succeed politically, they need to prove that Britain is in an economic mess regardless of facts. As Steph has rightly identified, consumer confidence is a key issue. If Labour keep trumpeting that the economy is in a mess, then consumers who listen to them will be reluctant to indulge in optional expenditure.

I therefore suggest that the trumpeting of Labour can become a self fulfilling prophecy. I don't have a solution other than to question their cynicism.

If annual UK CPI and RPI inflation are 4% and 5. something per cent and quarterly GDP is 0.5 as improperly adjusted ... then as and when GDP is adjusted properly ... accurate GDP figures would show the UK economy is in an embedded slump/depression/recession and the only thing growing is ... UK imports and UK trade deficit.

If our country's main economic statistic is so pathetic that we count inflation and overall import growth as 'growth' ... then we really must 'deserve it'.

Comment number 42.

While I agree that automatic politicking is mindless and ultimately futile (and shadow cabinets of all persuasions do this - don't fool yourself), to suggest we are in a healthy economic state, or even on an upward slope, is ridiculous.

Last quarter was blamed on unseasonably cold weather and we have not even recovered to the activity we had before that period. Is that really growth?

Don't believe me though check what the FT has to say about the situation.

Comment number 43.

The UK Statistics Authority recently removed the National Statistics designation of the construction price indices; problems here would presumably affect the growth estimates for the construction sector.

Have the concerns of the UKSA been addressed, and to what extent might they give further cause to doubt the recent estimates of strong growth in the sector?

Comment number 44.

@40: Telling it how it is for most people outside the finance industry - whose employees are quite happily making hay with a bailout which is now being paid for by lower paid - is hardly cynical, anymore than it would be a doctor telling a man he has a broken leg when it's... erm... broken.

But, given that the Labour Party has no answers, I do agree with your implication that Ed Balls should - until he has found some - shut up whining.

Comment number 45.

I would say we need another targeted stimulus package to keep the construction boom in full swing. The requirement for high speed rail projects are likely to expand throughout the world as the oil crisis starts to undermine the viability of air travel. By generating business for the appropriately skilled contractors we can generate an export business that generates growth.

I would also like to see a stimulus package that encourages growth in the wind and wave turbine industries as this too will likely be a growth market.

In addition with the situation in Japan maybe its time for the Government to support the expansion of parts and component suppliers. There must be sufficient skilled workforce to exploit this demand.

Comment number 46.

The UK trundled along with a benign/helpful world economy and government overspending typically generating a 2 to 2.5% real annual growth in GDP. The UK is now in the situation in which the structural deficit is (hopefully) going to be brought under control, the UK's major export economies are not in a benign/helpful state and the high rate of inflation is probably knocking about 0.5% off GDP growth per year. So Mr Balls can waffle until his heart is content, and Mr Milliband can focus on his target of being elected, but what is, is. It would be better if they actually both realised their targets should be more meaningful i.e. improving the UK's future. A few things that they might instead turn their "intellects" to are:

(i) whether the structural deficit is tackled in 5 or 10 years what is a realistic average future GDP annual growth figure and how should it be achieved?(ii) what does the UK mean by a balanced economy - upstream/downstream, manufactuing/services, investment/consumption, public/private, designed/market etc.? (iii) how does the UK stress test itself in the future - OBR, faith in no boom&bust, government based scenarios, ratings agencies ...? (iv) which parts of the cuts can the opposition agree with and how can they be carried out with least downside?(v) apart from reducing inflation (which the BoE is ignoring) and tackling red tape / complex tax laws what can government do to help growth - ease planning, dump the green belt, infrastructural projects, confidence, fund investment but not consumption degrees, ban/encourage unions, let marginal businesses fail (Schumpeter-ize), dynamic capital reserve requirements ...? (vi) if it is only controlling inflation that can help growth should the unelected BoE remain independent?

Well, it would be easy to continue with such a list, but whilst the opposition continues to fail the UK in its role then there is little point. No Eds are better than two, but surely there must be some innovation somewhere in the opposition that can make a worthwhile contribution? If the UK 'elite' cannot grow alternative policies how are we (the UK polloi) supposed to grow the economy?

Comment number 47.

#2 I believe the Government has been arguing that the privare sector would more than compensate for the loss of whatever the public sector contributes to GDP (presumably wages)#16 The UK in the 1930s stimulated the economy out of the Great Recesssion.#22 I doubt even the most pessimistic left wingers could actually talk a country into a douple dip recession. One of the most noticeable things about Oppositions of both parties is that they are regularly accused by the Government of the day of "talking Britain down" or some equivalent. Partly it's what Oppositions are supposed to do - oppose & criticise. Partly it's because we have an adversarial political system (often pursued with vigour in HYS and comments on BBC blogs) which encourages heat rather than light. If more politicians accepted their mistakes & were more generous with their opponents, while seeking a greater measure of agreement & consensus, we might have better decisions, fewer unnecessary changes of direction & a more mature political process.

Comment number 48.

These figures must be seen as a disappointment to everybody - including (and perhaps especially) the City. Even before these figures announced the currency market was showing a "sea of red" for sterling against all foreign currencies bar Japan (which is going through 'living hell' at present).Although this 0.5% figure was expected in advance, you got the distinct impression that the City were really hoping for something better than this, but the reality is that we have a big fat zero growth for the last 6 months and it makes you wonder where on earth the badly needed growth is going to come from?I think that this Coalition Government/OBR should be the most concerned of all and Osborne's empty comment that "things are on track" shows a man who is completely divorced from reality, in my opinion! This could turn into a political as well as economic disaster.

Comment number 49.

Life already feels hard. Then I look at those figures of stillpuzzled @6 and see the results of the destruction of manufacturing in the UK and I really want to cry.

Richard Bunning @ 8 rightly points out that any revival in manufacturing is probably a result of devaluation of Sterling. And devaluation hits all of us ultimately as inflation. He didn’t mention that since we manufacture so little, those things we do are constructed largely of imported items. The consequence is that the gain from devaluation is at best a short lived false dawn. If it has given manufacturing as start, then we may well need to re-value to build on it.

Does stimulation work? Who exactly is being stimulated? I don’t feel stimulated. Do any of you? I understand that rich bankers, presumably they have been stimulated, (and rich foreigners, who don’t need to be stimulated) are getting back into further inflating the central London property bubble. I’m sure that will do all the rest of as much good as devaluation.

The best way to stimulate the economy in the long term might be to link politicians’ pensions to the future output of manufacturing industry. If they always had been, Harold Wilson, Jim Callaghan, Margaret Thatcher and Tone Blair might have saved/helped our manufacturing with a little of the amazing enthusiasm that Gordon Brown showed for our banks.

Oh well, let’s forget our sorrows and indulge in the opiate of the masses, the Champions’ League.

Comment number 50.

Stephanie, it's quite interesting to see the difference in outlook between the US/ UK/ Europe and the strongly resource-based economies. South Africa, for example, seems to be more concerned about inflation given the rising cost of fuel and the debate about raising interest rates seems to extend from month to month. The turmoil in most of the West has led to both a stronger rand as well as a record high gold price, which is helping maintain quite optimistic expectations on overall local GDP growth.

So what now for the UK though... sit tight and hope that the expected boost from the upcoming royal wedding helps add a few basis points to the GDP growth rate? I think I'll join WolfiePeters above with some escapism into the Champions' League it is, now that the cricket world cup is over at least!

I can’t for the life of me find any evidence of a fall in the pound that relates to the dollar.

As mentioned by others interest rates need to go up to collapse what’s left of the housing and commercial property bubble in the U.K. and I feel sure that the only reason they have not is the threat to the banks balance sheets and nothing else.

The construction industry (down 7% in the first quarter) need to get back to work and realistically priced premises and dwellings would help.

Comment number 52.

40. At 18:04pm 27th Apr 2011, Henry Quimper wrote: "I know that this is an economic rather than a political blog, but I do believe that part of the low numbers is down to politics. For Labour to succeed politically, they need to prove that Britain is in an economic mess regardless of facts. As Steph has rightly identified, consumer confidence is a key issue. If Labour keep trumpeting that the economy is in a mess, then consumers who listen to them will be reluctant to indulge in optional expenditure.I therefore suggest that the trumpeting of Labour can become a self fulfilling prophecy. I don't have a solution other than to question their cynicism."

Expectations do play a part in consumer behaviour and through it demand.

However,Mr.Osborne doesn`t need Labour`s help in reducing expectations,he does a pretty good job himself with scare stories about creditors knocking on his front door and comparisons with Greece. It`s all nonsense of course,as Mervyin King told Willileaks,"He`s more interested in politics than economics"

Comment number 53.

44. At 18:25pm 27th Apr 2011, StuartReader wrote: "@40: Telling it how it is for most people outside the finance industry - whose employees are quite happily making hay with a bailout which is now being paid for by lower paid - is hardly cynical, anymore than it would be a doctor telling a man he has a broken leg when it's... erm... broken.But, given that the Labour Party has no answers, I do agree with your implication that Ed Balls should - until he has found some - shut up whining."

You shouldn`t expect answers.Rather whether you are asking the right questions?,chief of which is whether deflation of the kind now being pursued is the solution to slow growth,high unemployment and large government debt.

There is an alternative model.Where has it been applied?,what has been the consequence,how do you evaluate costs and benefits.

Now you`ve got started treat yourself to some interesting results.Be my guest.

Comment number 54.

I have been feeling a bit more up-beat all day even before the financial adviser told me my pension fund was in better shape than I thought it was. But then that's the benefit of Highland blood; you always assume the worst so something less bad always cheers you up.

The reason for my cheer is that at last the numbers or should I say indicators are behaving like they used to before 2005. I am starting to get a feel of just what is going on. The simple fact is that for years now there has been too much money, or should I say credit, sloshing about creating a sense of permanence to what was nothing more than a great big smelly bubble. The bubble has gone: hurrah!

Times are difficult but they have to be. What do you expect when there has been a bubble economy distorting every perceiveable part of our lives? The government is trying to balance its books so there have to be cuts in government spending and this has a negative effect on the high street. So of course such parts of the economy are going to wilt and shrink in the harsh reality. Painful and unpleasant but what did anyone expect after autumn 2008?

Then we talked about double-dips, W-shaped recessions, bath-shaped slumps: you name it we had a description. The best suggestion came from someone who said it will be a long flat but bumpy road. I think that is about right. We are on a long, badly made road with nasty bumps and big pot-holes: just like the one outside your house.

At least we now know what we have to do, namely get out coats off and get down to work. The party is over, well and truly. I hope the government extracts its digit and starts intervening in the economy facilitating the growth of companies, the start up of businesses and promoting employment.

Comment number 55.

I'm told that economists use decimal points because they have a sense of humour. All this hooha over 0.5% has everything to do with politics and nothing to do with the nation's well being. One side's political fortunes will benefit if they can claim a double dip recession, the other if they can claim recovery. The things that really matter, infant mortality, life expectancy, homelessness, well those measures will take longer to come through, but they're the ones we should really be watching,

Comment number 56.

Something often overlooked is dependencies between the public and private sector.

All bus services in London are totally dependant on public sector financing; trains (country wide) are the same… both carry large subsidies from the taxpayer that turn into profits for the private companies operating in this area and the banks in particular which hold the rolling stock (trains) that the operators have to hire.

Like the NHS (which also supports large numbers of privately operated companies) who have to tender or outsource parts of their operations to the private sector, are also dependant on the “tendering” process which by design favours the larger companies.

I.T. is a good example here especially with the NHS as a far as I can see all their major projects bar none have failed in one way or the other, this also applies to other areas of government spending with I.D. cards looming high on the list.

There are some private companies, especially in the transport sector whose entire modus operandi as relates to their operating profits, are paid from the public purse… why?

If company x can make a profit of £26 mill on 25% of the London Bus market and three or four train tranches (and they pay reasonable wages)… why the hell cant the government?

Of course the NHS is all subsidies or so we are led to believe, but no-one ever measures the “output” of it in any meaningfully way, the same applies to the Police and other essential services provided by (say) local authorities, its all input provided by the taxpayer that’s measured, this is entirely wrong.

This would indicate to me that down the road a way comes the collapse of private companies who are dependant on public financing - in a big way… where are the new jobs going to come from then as this aspect accounts for a huge number of jobs in all our major metropolises?

Its time to initiate some major infrastructure projects (government spending) and totally re-evaluate our tendering process for all types of operations so as to allow the small companies to gain a foothold.

Big companies go in cheap to tenders, bankrupt the opposition and then corner the market – you cant blame them, that’s what they do, maximise their profits and they have a legal obligation to so do, this needs to be changed by legislation for any company tendering for a publicly operated service run for the benefit of the people that’s subsidised.

Make no mistake the cuts that are about to be implemented in the public sector will have major ramifications for the private sector for those companies on short term contracts or long term that are about to expire.

Comment number 57.

We don't need a crystal ball to predict our economic future, we have the book. The Japanese banks pissed away their baby boomers investments in the same way ours did and they ended up with the lost decade. stanilic's prediction of a long bumpy road is exactly it,

As you will see, at the end of 2007, £1 was worth roughly 1.50euro, it's not down around 1.15euro.

As for the dollar, at the end of 2007, £1 was worth roughly $2, now it's around $1.65.

Speculation that the BoE will raise interest rates in this year - sooner than later if the calls of some of the MPC are heeded - is keeping the pound trading in a fairly narrow range - compared with the sharp falls in 2008 - against both currencies.

A weaker currency has helped our exporting businesses, particularly to Europe, our biggest export area, but has fueled commodity inflation, particularly where oil is concerned, which is priced in US dollars.

Comment number 59.

@53: "You shouldn`t expect answers.Rather whether you are asking the right questions?,chief of which is whether deflation of the kind now being pursued is the solution to slow growth,high unemployment and large government debt.

There is an alternative model.Where has it been applied?,what has been the consequence,how do you evaluate costs and benefits.

Now you`ve got started treat yourself to some interesting results.Be my guest."

I don't expect answers from Ed Balls but then it's not me asking the questions. As for interesting results, I'm quite impressed by the work of Ellen Hodgson Brown and her book Web of Debt which, although aimed at a US audience, has major ramifications for the UK and, indeed, the rest of the world. What I've read seems to make sense... excepts here - https://www.webofdebt.com/

Comment number 61.

It's all pretty depressing really. We're all just getting poorer and poorer and unless we can find some more oil or gas reserves or something to dig up out of the ground to sell on we're going nowhere fast. At this rate of economic decline and the pound in the doldrums how long will it be before its economical to reopen the coalfields up again?

I'd love it to, but I have to ask, what construction boom. Unfortunately, what

#39. Brian Ashdown wrote:

"As a professional working in the construction industry I know that many contractors and other professionals are surviving from contracts that commenced during the previous governments investment programs, particularly in social housing, and many of these will soon be coming to an end. With the private sector only just "ticking over" I would expect that by the autumn, if there is no financial commitment from this government then a large proportion of the construction industry will just disappear, jobs included and a serious knock on effect to the industry's suppliers & manufacturers. We "ain't seen nothin' yet" to coin a phrase."

Comment number 65.

GDP is still an entirely defective measure as it is built upon a basis that deliberately and wantonly ignores assets, and asset price inflation, this gives rise to the craziness of asset price inflation being seen as a good thing when in fact that it is far far more damaging than all revenue inflation.

We must seek the urgent reform of economics!

The asset price bubble needs to be deflated before 'normal economic service' can re start - this will take twenty or more years (c.f the 1870 'Long Depression') and that is the measure of the idiocy of the last decade or more when interest rates were far far too low as asset price inflation was deliberately and stupidly ignored - all the economists responsible for this must be sacked!

These stupidly overpriced assets make it almost impossible for the country to re-establish its competitiveness and cripple every industry that uses assets (except banking!).

We must do everything to escape this dire debt trap, including bankrupting the banks - if necessary, as they have created the bubble - or the rest of the country will remain crippled and live in austerity for decades.

Comment number 66.

This confusion between the role of economists and politicians is interesting, in particular the remark by the BoE boss, Merve the Swerve, about Osborne.

Politics is about retaining power and a job at any cost, as simple as that.

What economists and financial experts advise is of passing interest to politicians at best and often seen as having a potential of mild embarressment at worst. Our contemporary politicians of all parties have their own political agenda and the national financial and economic mess is only a concern when the electorate threatens the politicians individual or parties interests to retain power.

The last UK Labour government created the biggest mess since the 1930s with the simple political objective of staying in power by the use of a synthesised feel good factor amongst the masses supported by the highest personal and government debt per capita in the World in 2007.

Where were the UK and international economists, other than Joe Stiglitz and one or two others, when the nation was being cynically manipulated by the Brown/Balls axis of incompetence over an 8 year period?

Well, nowhere is the answer, because politicians, their selected economic advisors and their media lackies are one and the same, indisinguishable as rotten apples in a barrel.

Comment number 67.

@65: John, your call for a rapid rise in interest rates (not that it appears likely to happen) would achieve what? A house price crash? Possibly. And those who are mortgaged up to the hilt could be forced to hand back keys and, as there's little of what used to be called council housing, pushed into the hands of the buy-to-letters who will profit from their misery. If reports are to be believed, much of the housing market activity at the moment is the cash-rich, many of whom need no mortgage.

A long-term gradual reduction in house prices, which seems to be the way things are going as disposable income is being eroded by tax increases, wage stagnation and inflation, would seem to me to be more manageable.

The knock-on effects of a rapid rise in interest rates to the levels you suggest would have a devastating impact on the wider economy, small businesses in particular, and jobs. Consequently, government revenue would fall and the public purse would bear the brunt of the social costs in housing and unemployment benefits.

Savers would benefit only in so far as they'd get a bigger return on their money but that would be eroded too by the inflationary aspects of higher interest rates as shops etc pass on increased costs.

Maybe I've missed something but I can't see how raising the base rate to five per cent would help our current situation, save it might strengthen the pound, cutting imported commodity prices, particularly fuel. The flip fside of course, the companies that do export might find their order books drying up.

Comment number 68.

The cumulative national debt, however, rose by almost 20% to more than 1.2 trillion and now accounts for 82.5% of GDP.While its ratio remains slightly better than euro-zone giants Germany, France or Italy, in the space of the last four years, it has risen rather alarmingly from 43%."

I'm sure that any measure that suggests the UK economy is better shape than Germany's is just WRONG.

Comment number 69.

It's all pretty depressing really. We're all just getting poorer and poorer and unless we can find some more oil or gas reserves or something to dig up out of the ground to sell on we're going nowhere fast. At this rate of economic decline and the pound in the doldrums how long will it be before its economical to reopen the coalfields up again?

Do you really think that the coalmines were closed because they weren't economical, and not because of what the miners did to Heath?

Comment number 70.

Ellen Brown, whose also formed an organisation called the Public Banking Institute, which seems to be gathering some momentum in the US, puts the case for publically-owned banks returning profits back to their communities. Apparently North Dakota has one such bank and other states are looking into the possibility of creating similar institutions. https://www.huffingtonpost.com/ellen-brown/washington-state-joins-mo_b_813019.html

I can't find anything in the way of 'high-brow' analysis of her book Web of Debt but she was criticised for using Germany's rise from near bankruptcy between the last two world wars as an analogy in the first imprint of her book. She seems to accept it wasn't the best analogy to use because of what Germany went on to become under Hitler. https://webofdebt.wordpress.com/questions-and-answers/response-to-gary-north/

Whether she's right or wrong, she does put across an interesting and easily readable point of view which is well referenced.

Comment number 71.

I am afraid Ms Flanders has got it wrong again (in an even more shocking way than in her last rant on the great news on unemployment). She clearly does not understand the effort and resources the ONS put into getting an accurate estimate of construction output. I wonder whether she has heard of concepts such as stratified random sampling etc. the number of firms the ONS surveys in the construction sector is far more than the quick straw poll she has carried out to come to the conclusion that the ONS has underestimated construction output. Comment number 39 illustrates just how ridiculous her argument is! This surely cannot pass for serious economic commentary let alone unbiased BBC journalism? Beyond this farcical piece of analysis, she clearly has not looked at the breakdown of the service sector that she highlights as being such a positive. A lot of it was driven by transport and communications growing strongly in Q1 2011. Now the snow made the roads very icy in Q4 2010, so no one should be surprised that the transport services sector had a bounce back! So a lot of the bounce in services was a payback for Q4 weakness! Moreover there was also a contribution from Government output of +0.2% which George Gideon Osborne wants to put into reverse! I would urge any readers of this blog to complain to the BBC if you agree with the conclusion I increasingly arrive at, that it is biased towards the Tories. If you looked at her news report for the TV news you would see she tries to suggest somehow that the weak growth in the UK was related to what is happening in the US. Unfortunately the US figures are being downgraded because of bad weather in Q1 so again trying to make excuses for Osborne's poor economic policies AGAIN!

Comment number 73.

#15 >>Thanks to public opposition we have kept OUR woods and forests - for now. As for keeping our jobs - not hopeful.

It's a real pity that not enough people opposed Gormless Gordon's Sale of the Century with OUR gold !! We would have got 3 times the price and 4 times the value if we can sell it NOW !!

Having sold the family silver (gold ??) and everything else to finance "no more booms or busts", the pair of them (Blair and Brown) are off to well-paid jobs. Meanwhile, Millibrain is still bleating about more spendings without *ANY* idea at all where the money is going to come from to finance the spendings !! That poor little boy cuts a rather sad and pathetic figure !!

Comment number 75.

#21 >>ARM may have just made £50m but they should be making ten fold that by actually making the things.

It may surprise you to know that ARM *DID* try "making the things" in Britain but were driver out of the country by government policies, including punitive measures against these "dirty Capitalists" !! Now they are "making the things" elsewhere, including nice, welcoming Communist countries !!

Comment number 77.

#45 >>The requirement for high speed rail projects are likely to expand throughout the world as the oil crisis starts to undermine the viability of air travel. By generating business for the appropriately skilled contractors we can generate an export business that generates growth.

Que ?? How did you come to this conclusion ?? How did you go from building local infrastructure to export business to growth ?? The only known growth so far is the growth in Skilled Construction workers emigrating to Aussieland where there are jobs crying out for people and the pay is so much better !!

Comment number 78.

#47>>If more politicians accepted their mistakes & were more generous with their opponents, while seeking a greater measure of agreement & consensus, we might have better decisions, fewer unnecessary changes of direction & a more mature political process.

I'm very sure they will when "the lion lay down with the lamb in green pastures" !! Meanwhile, back on Earth,.......

Comment number 79.

#51 >> Re. your pointing to a graph without any definition(s) of the values on the x- and y-axes, can you tell us what it *REALLY* means ?? If the rise is merely measured in quids, then you need to make the adjustments for the fact that the quid in 1948 was backed by the gold standard and that between then and now, the quid has fallen steadily in value when measured against a basket of currencies !!

Comment number 80.

#56 >>I.T. is a good example here especially with the NHS as a far as I can see all their major projects bar none have failed in one way or the other, this also applies to other areas of government spending with I.D. cards looming high on the list.

Impossible !! Why, the Great Gordo, himself decreed that the IT will succeed and he paid them a lot of taxpayers' money to do so !! So it *MUST* have succeeded !!

After all, why has he paid out £6 billion of taxpayers' money to the IT contractor(s) if the project(s) have failed ?? Or are you implying dark and secret doings......??

Comment number 82.

#70>>....Germany's rise from near bankruptcy between the last two world wars

Germany, between the last two world wars was known as the Wiemar Republic and was used as a lesson on how and why *NOT* to devalue your currency to create the illusion of growth. The new/current example is, of course, Zimbabwe !! Who knows what the future may bring ?? Perhaps it'll be Britain's turn to be used as that example !!

Comment number 83.

The so-called "Mess" was an international collapse of private capital equivalent to 1929.Debt and deficit rocketed to stabilize the banks.

Prior to the crisis, debt was lower than that inherited in 1997,the deficit was the same.(IFS 2008)The money went to pay for underfunded public services to bring them close to European levels.These may not be your priorities,I think they were worth doing.

The problem is capitalism,not Brown.If you don`t understand that you won`t understand anything else.

Comment number 84.

The cumulative national debt, however, rose by almost 20% to more than 1.2 trillion and now accounts for 82.5% of GDP.While its ratio remains slightly better than euro-zone giants Germany, France or Italy, in the space of the last four years, it has risen rather alarmingly from 43%."

============================================================

Bear in mind that Germany spent close to 1.6 Trillion Euros bringing the former East Germany up to scratch over a 20 year period.

Comment number 87.

10. At 13:45pm 27th Apr 2011, Dafydd wrote: I read here and many other places that the economy has 'barely grown' in the last two quaters. By my calculations, if the base level was 100 at the end of Q3 2010, Q4 2010 saw a 0.5% contraction taking us to 99.5. Q1 2011 saw a 0.5% expansion leaving us at 99.9975. So the economy has not 'barely' grown, but contracted, over the previous two quarters.

Comment number 88.

For a proper critique of Ellen Brown's 'Web of Debt' search for 'Gary North Web of Debt' in google, take the first link and look for the Historical Errors and Economic Errors links on his website.When I try and post links to any site here it seems to fail.

Web of Debt is an awful book - most of the 'well referenced' viewpoints are based on half-truths, false internet quotes and lies

Comment number 89.

Nearly all commentators stress the importance of the consumer to the recovery.Thirty years ago the markets for most products were not global and the supply chain was inefficient. Spending on necessities is constant and therefore irrelevant.Then, ten pounds spent on non-essentials became 8.80 in wages and 0.20 in corporation tax and UK profits. Now probably it is 4.00 in wages and 5.90 in imports and 0.10 in corporation tax and UK profits.

A UK multiplier of 10 has become a multiplier of 1.7 and few are going to make an investment in new products on the basis of a UK market.

Comment number 91.

For a proper critique of Ellen Brown's 'Web of Debt' search for 'Gary North Web of Debt' in google, take the first link and look for the Historical Errors and Economic Errors links on his website.When I try and post links to any site here it seems to fail.

Web of Debt is an awful book - most of the 'well referenced' viewpoints are based on half-truths, false internet quotes and lies

Comment number 92.

While there is no doubt that Gary North has his own bias and viewpoint (completely the opposite to mine - he wants FRB abolished) his critique on web of debt is extremely thorough.

The historical errors and economic errors from 'Web of Debt' are clearly laid out with evidence and ellen has acknowledged many of them and incorporated them into updated versions of 'Web of Debt'. I would encourage you to read them and am happy to discuss further.

Comment number 93.

While there is no doubt that Gary North has his own bias and viewpoint (completely the opposite to mine - he wants FRB abolished) his critique on web of debt is extremely thorough.

The historical errors and economic errors from 'Web of Debt' are clearly laid out with evidence and ellen has acknowledged many of them and incorporated them into updated versions of 'Web of Debt'. I would encourage you to read them and am happy to discuss further.

"(completely the opposite to mine - he wants FRB abolished)"...............It's possible that on this point he's correct & is in agreement with Ellen Brown.

Ascertaining the reasons behind his 'critque' appear to show that she has particularly 'wound him up' by backing QE & the borrowing of cheap 'fiat' money, at low interest rates, by the federal government, in an attempt to kick-start the economy. He considers that this indicates she has changed her views.

She agrees with this course of action, only as an interim solution in the absence of any other & for that reason alone.

Her backing of QE for this purpose is obviously far too left wing & socialist in nature for someone with his libertarian views to agree with as his narrow view is unable to understand that the state must create money in a truly free modern society. You can't eat gold, no matter how much religious text is quoted.

Yes, he picked up some inaccuracies in her earlier book, that she's since taken on board. However, certainly nothing that destroys the basic tenet of her work.

There is a growing number who believe that she is correct in assertion that 'the web of debt' has been created by an international banking cartel that relies on us believing that we have no recourse but to use money created by their banks as loans, debt money created by FRB. She is correct in her assertion that we do have recourse. "Money today is simply a legal agreement, an acknowledgment of services performed and debt owed. Every country can and should issue its own money and its own national credit."

Of course, it won't happen. That doesn't detract from the fact that the current capitalist economic system is broken & needs to change, however it's more likely that we will carry on as before & are doomed to repeat the mistakes of the past.

Comment number 95.

If it IS good news the new war will continue. ('We can afford it - and the cuts as well'). If, after revisions etc., it's BAD news after all, this new war will continue. (As a diversion from the government policies creating it)

Comment number 96.

Still tough and rough economic environment. Inflation, prices for fuel, EURO zone bail-outs, deficit spending.Never thought that Spain is being hit so hard, unemployment about 21%. It´s a western country EU- even the new Eastern European countries are doing better.No room for future investments, new technologies. Oh that´s hard.

Comment number 97.

Its only when the present generation of bay city rollers approach retirement age at 82 with the pension carrot still dangling in front from the hoop arround their foreheads will they realise FROM WHICH top HAT THE QE RABBIT was pulled

Comment number 98.

Furthermore we need to know from our illected reprehensitives how they multiply their QErabbits ,do they stroke their ears when they are not looking and say" whos a pretty bunny then , would you like a quick buck,.were out of pounds ,woof woof ?!!!

Comment number 99.

And finally .Can QE rabbits form the basis of good sosheowe economic relationShips with Aircraft carrier bags or will the curs of the QE rabbits [ "for QE me"] resound accross the nations bowlingk greens in time for wimbledon/commons luv all date with mixamateoweaces strawberries and cream.

BBC links

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.